The Big Challenges for Small Charities

It is what you spend not what you keep that makes you charitable

This week is #SmallCharityWeek and today is discussion day, focussing on the big issues facing the small charity sector right now.

When we founded Charity Intelligence our aim was to ensure professional support and information was accessible to help all charities achieve great results and make the right connections through informed choices.

Since 2017, over 15,000 charities have used our free and impartial website to appoint the right vetted adviser to help them achieve their goals and over 3,000 of those are charities with income under £100,000, but we want to provide support to many more.

The Challenges

Small charities face a growing number of challenges but not as many as the media or press likes to portray. As with any small enterprise, group or organisation, small charities have limited resources and time while their aspirations are often great! The biggest issues we now face in a period of increasing demand on social services, inflation and cost of living is the sustainability of smaller charities to meet this demand while remaining solvent and relevant in a shifting economic environment. The pandemic and post Covid world thrown things up in the air somewhat. While many charities survived the pandemic relatively well thanks to government support through furlough and loans and grant makers who have stepped up for support, smaller charities will not have benefitted from this. 

Funding

Smaller charities will struggle with securing sufficient funding to support their programs and initiatives especially those on contracts or receiving possibly reduced government grants at a time of increased demand for services, therefore need to concentrate on diverse funding streams. A lack of cashflow is one of the clearest ways to kill a charity as are trustees who make rash and poor decisions at the wrong time, such as selling their investments when markets fall and don’t reinvest when they recover. Therefore the need to get good charity advice is essential.

Trust

Maintaining public trust is crucial for charities, as it affects their credibility, fundraising efforts, and overall impact. The acid test is the 'Daily Mail’, to remain off their front page and appreciate that social media can be caustic to charity reputations in the speed and attitude of views. We have seen an uptick in instances of charity mismanagement, fraud, or unethical behaviour which can damage the reputation of the entire sector, making it harder for other organisations to gain public support. Covid and the resulting home-working has put significant pressure on those working in charity sector who are mostly volunteers or on lower wages. In turn, this has lead to increasing whistleblowing, poorer mental health, bullying and associated HR issues as reflected by Helen Stephenson, CEO Charity Commission stressing they do not to be used as a mediator for charity disputes. Therefore ensuring effective governance and maintaining transparency is crucial for charities. Maintaining public trust is vital for charities, and any governance failures can damage their reputation.

Relationships

Attracting and retaining donors and volunteers has become increasingly challenging due to changing demographics, shifting donor preferences, and increased competition between charities. Smaller charities need to invest time and effort in engaging with their supporters and building meaningful relationships, in person, on line and via social media.

Technology

The increasing importance of technology and online platforms poses both opportunities and challenges for smaller charities. While digital tools can enhance fundraising, communication, and operational efficiency, many smaller charities struggle to adapt and invest in the necessary infrastructure and digital skills. Demonstrating the impact of their work is essential for charities to secure funding and maintain public support. Measuring and evaluating outcomes can be challenging and there is often a need for robust monitoring and evaluation frameworks to provide evidence of the charity's effectiveness but this comes with a cost, time and effort.

Collaboration

So some things to consider are to collaborate, partner with other charities, merge or spend out (spend what is left and close). A merger appears to be a dirty word but this is not the profit making corporate world. It is not a corporate take-over but transfer of assets but people are the problem. How many trustees and senior executives want to fall on their swords or relinquish the organisation they have set up or worked tirelessly for? Is this time to swallow your pride for the sake of your beneficiaries? If you haven’t the stomach of this collaboration between charities, as well as with other sectors such as government and business, can help address complex societal challenges as well as building effective partnerships. What ever the solution it will require investment in relationship-building and coordination.

 Resilience

Charities are resilient as they are people, reliant on volunteers and good will – thankfully common sense prevails despite what you read in the press or on social media. Our advice is to pivot and adapt in this changing world. If you wish to remain independent and grow your charity, it will require work, but maybe join forces for the common good.

After all, It is what you spend not what you keep that makes you charitable.

Get in touch

If you are curious to know why thousands of Charities have already registered with Charity Intelligence and how we can help you, head to www.charityintelligence.co.uk it's FREE to register or if you’d like to have a chat, we’d love to hear from you – contact Lynn or Guy at: info@charityintelligence.co.uk